HC Deb 29 February 1988 vol 128 cc640-1
11. Mr. Flynn

To ask the Secretary of State for Wales what percentage of the average domestic and industrial water rate bill for 1988–89 is attributable to (a) Welsh water authority financial targets having to be above break-even, (b) current cost accounting having to be used in place of long-term loans, (c) Welsh water having to bear the cost of paying the capital and interest repayments on the debt of £450 million and (d) the cost of raising beach bathing cleanliness standards to EEC limits.

Mr. Grist

The assessment of water charges is a matter for the Welsh water authority. The authority estimates that the information asked for is as follows: (a) 16 per cent., (b) 15 per cent., (c) 24 per cent., and (d) 4 per cent.

Mr. Flynn

The large sum, almost £20, added to the bills of every ratepayer in Wales as a result of the changes in domestic rate relief means that way over half the total cost of rate bills in Wales is due to Government policy. Will the Minister admit that the Government have imposed on Welsh water ratepayers a financial straitjacket that is entirely artificial and contrived? The figure has increased by more than twice the rate of inflation for many years now. When will the Government stop this long-running confidence trick against the payers of water rates in Wales and introduce a little fairness into the system?

Mr. Grist

I believe that the Welsh water authority, as run at present, is a great success for the people of Wales. In the Welsh water authority we inherited, in many cases, ill-run facilities. Under the Government capital expenditure in the authority has risen by 33 per cent., compared with 11 per cent. under the Labour Government. If one considers why charges have sometimes increased, one finds that it is because that investment was ignored in the past.

Mr. Alan W. Williams

Does the Minister agree with the way in which the charges have been levied? There was a whopping increase of over 20 per cent. in standing charges, as a result of which rich people have a proportionally lower increase, whereas poorer households have a 20 per cent. increase in their water charges this year.

Mr. Grist

The hon. Gentleman is right to say that the Welsh water authority is implementing as a policy the raising of the standing charge element until it represents 50 per cent. of the average bill, which reflects the fact that 90 per cent. of all costs are fixed.

Mr. Roy Hughes

Does the Minister appreciate that his answers are unsatisfactory? Does he realise, for instance, that in recent years charges in Newport have increased by 2,500 per cent. and that standing charges in Wales will soon be the highest in Britain—£36 compared with £6 in Yorkshire? Can the hon. Gentleman not see how this is damaging industry, let alone causing hardship for households? When will he get rid of this complacency and do something about this dreadful situation?

Mr. Grist

I do not think that it is a matter of complacency that the Welsh water authority should be run economically and efficiently. That is precisely what the Government have been ensuring.

Mr. Wigley

Does the Minister accept that the financial targets could be reached with far lower charges for consumers if the Welsh water authority did not have an enormous historic debt around its neck? Will the hon. Gentleman confirm that the first thing that the Government will do with privatisation is to write off that debt? Why not do it now, so that consumers can get the benefits?

Mr. Grist

I had hoped that the hon. Gentleman would understand that, if the charges, which are rising this year by 8 per cent., were cut the investment needs of the Welsh water authority would have to be met from further borrowing, which would raise the debt interest that the Welsh water authority has to pay in the future.